- Property investor Stephen Yin says Birmingham is an overlooked market.
- He sees it as a good place to buy in terms of returns and barriers to entry.
- The Birmingham native owns nine properties in his hometown and earns $3,000 a month in rent.
Stephen Yin was 24 when he purchased his first investment property in 2020.
He told an insider that he “kind of just happened to fall for real estate.” Typically based in Los Angeles, Mr. Ying has been working in his private equity for the past three years. He returned home to Birmingham, Alabama early in the pandemic.
A local friend contacted me and asked if I had ever considered investing in real estate. Yin, who has been investing money in the stock market since 2017, replied that he had not done so yet, but heeded a friend’s advice to check out the Birmingham subway market.
After doing some research, “I realized that Birmingham has one of the best real estate markets in the country, both in terms of revenue and in terms of barriers to entry,” he said. “In many areas, you can get a three-bedroom, one-bathroom for under $100,000. We will be considering it. Property.”
Even with all that cash on hand, it’s a lot of money, but buying in a city like Birmingham is much easier to achieve than buying in a big, expensive market like New York, Los Angeles or San Francisco, he says. pointed out. What’s more, if you move into the property with a friend, family member, or business partner, you can cut the initial cost in half.
That’s what Yin has done to six of the nine properties he owns that the insider has verified. He shares his three with one friend of his and his three with another friend. As for the remaining three of his companies, he is his 100% shareholder.
All his properties are in Birmingham, where he grew up.
Birmingham, Alabama’s main city, is overshadowed by other populous southern cities, Yin said. Cities in Florida like Tampa. ”
While there aren’t many big businesses and population growth may not be as explosive as in other major cities, he believes his hometown is a great place to buy long-term rental properties.
“Birmingham has a stable population, several Fortune 500 companies including Vulcan Materials, and housing is cheap, so rent per square foot will be high,” he said.
It is the third largest city in Alabama, after Huntsville and Montgomery. However, Birmingham has not experienced a population boom. According to the U.S. Census Bureau, the population fell from just over 212,000 in 2010 to 200,000 in 2020. The population will decline by another 1.6% between 2020 and 2021, continuing the recent trend of decline from 200,763 to 197,575.
However, house prices appear to be on the rise.according to Data from Realtor.comThe average price of a home in Birmingham is $188,500, up almost 11% year-on-year, according to. The median selling price in Birmingham in September was $231,000, up 15.5% from the same period last year. Redfin data show.
Yin doesn’t necessarily invest in average homes, but buys low-priced properties that he believes will rise in price. He uses his familiarity with the city to invest in promising areas.
“Having grown up there, I have a good understanding of different regions. How has it changed over time and how do you see it changing in the next three to five years?” What we got for $40,000 was a three-bedroom, one-bathroom house. Yin had saved about 50% of his six-figure salary for nearly three years, and the funds were available in a high-yield savings account.
He purchased a second investment property in early 2021. Another he bought for $44,000 with three bedrooms and one bathroom. He also paid in cash. His seven other properties he owns are financed at 20% down.
From nine properties he owns and co-owns, Yin earns about $3,000 a month in rental income. (That’s his “business income,” he said. It’s less property management and maintenance, not less insurance and property taxes, and it’s a lump sum for him.)
He’s playing the long game, he said.
After all, “If you want to buy something and double your wealth in six months, Birmingham is not the place,” he said. “We don’t see the frothy stuff we’ve seen in Austin over the past two years, but it’s a place that has seen steady growth over time.”
Yin is also open to investing outside of Birmingham. He toured Huntsville, Alabama’s largest city. 217,000 residents, last year he said: In the meantime, Birmingham remains my focus. ”
But he’s not buying now.
“Rates are too high,” he said, referring to mortgage rates that have risen since the beginning of the year. September 2022, 30-year fixed-rate mortgages hit their highest level since 2008. “I could still make money, but I can’t make it the way I want to make it.”